What is in this article?:
- USDA reports provide some price direction for corn, soybeans and wheat
- Big feed use numbers
• “Taken together, the information in last Friday’s reports may provide some short-term support for old-crop corn prices and for wheat prices.”
• “With such large crop prospects in South America and the likelihood of a large rebound in U.S. corn and soybean production in 2013, new-crop corn and soybean prices may remain under pressure.”
On Jan. 11, the USDA released a series of reports that provide important fundamental information for the crop markets.
The information included the final estimate of the size of the 2012 United States corn and soybean crops, estimates of Dec. 1 crop inventories, a winter wheat seedings estimate, and updated U.S. and world supply and consumption forecasts for the current marketing year.
University of Illinois agricultural economist Darrel Good offered his analysis of the reports.
“For corn, the 2012 U.S. crop is estimated at 10.78 billion bushels, 55 million larger than the November forecast,” Good said.
“The estimate of planted acreage of corn for all purposes was increased by 209,000 acres, the estimate of acreage harvested for grain was reduced by 346,000 acres, and the yield estimate was increased by 1.1 bushel per acre.
“The production estimate was larger than the pre-report average trade guess of just over 10.6 billion bushels, but the estimate of Dec. 1, 2012, stocks of corn was actually much smaller than the average guess.
“Stocks were estimated at a 9-year low of 8.03 billion bushels, compared to the average guess of about 8.2 billion. The stocks estimate implies that feed and residual use of corn has not slowed as a result of the small crop and high prices that began in June of last year.
“Because of the harvest of a large quantity of corn before the marketing year began on Sept.1, 2012, feed and residual use should be evaluated over the six-month period from June through November 2012.
“For that period, feed and residual use of corn totaled about 2.39 billion bushels, about 110 million more than use during the period from June through November 2011. Such an increase is a little surprising, but only because feed and residual use of wheat during that period was 125 million bushels larger than use in the previous year.
“As we have pointed out before, total grain feeding has been supported by only a very modest cut in livestock numbers and a sharp decline in the production of distillers’ grain,” Good said.